RBA cautious over future interest rate cuts, Nov meeting minutes show

Investing.com-- Reserve Bank of Australia policymakers were growing increasingly cautious over future interest rate cuts amid sticky inflation and signs of resilience in the labor market, the minutes of the bank’s November meeting showed on Tuesday.

The central bank had left interest rates unchanged at 3.60%, with a hold largely expected after third-quarter inflation data read substantially stronger than expected.

The minutes showed the RBA growing increasingly cautious over a resurgence in inflation, especially if demand strengthened and employment growth remained strong. 

Shifts in the RBA’s stance on the economy’s supply capacity and on whether monetary policy was restrictive could “limit the scope for further monetary easing,” the minutes said. 

Scenarios where the RBA may have to further loosen monetary policy included a worsening labor market and a slower than expected economic recovery, the minutes said. 

Australian labor growth data for October blew past expectations, data showed last week, while unemployment fell from a near four-year high, signaling that the labor market remained robust heading into the fourth quarter. 

The country is also set to begin releasing full monthly consumer price index inflation reports from later this month, granting the RBA more immediate insight into inflation than the quarterly prints. 

Strong labor and inflation data saw analysts largely dial down their forecasts for another rate cut by the RBA in December. ANZ expects the RBA to cut rates one final time in the first half of 2026.